The group improved its underlying profitability in the 12 months to 30 July: pre-tax profits rose 7.5% to 39.7m, and operating margins improved to 9.4% (2003: 8.3%).

Sales fell across all St Ives' markets, leading to an overall drop of 6% to 410.3m, although currency fluctuations also contributed to the reduction.

Restructuring, relocation and redundancies lead to exceptional costs and a goodwill write-off of 24.75m, resulting in a retained loss of 14.6m for the year.  

In addition to the closure of its American Case-Hoyt operation in April, St Ives also closed its litho financial print business at Marlton, New Jersey, with the loss of 60 jobs. It also relocated its Kent multimedia operation to a more modern factory.

Chairman Miles Emley said the results were creditable and "not bad in the circumstances".

The group is concentrating on more specialist work and less on commodity products, and is adding to the services it offers clients beyond print in books, for example, it has added ancillary services such as direct delivery of books to retailers, price stickering and shrinkwrapping.

Direct response grew sales and profits in the UK, and German wing Johler Druck more than halved its losses.

Financial printing remains in the doldrums in the UK and Europe, although activity has picked up in the States.

In magazines price pressure increased, in particular for long-run, less time-sensitive titles. The group has moved to reduce its cost base with a swathe of new investments, including new presses at Peterborough and Roche and a major investment in Ferag bindery kit at Peterborough that reduced the headcount at the plant by 50.

Costs in web offset printing (across all the group's divisions that use web) were described as being "under particularly close scrutiny".

St Ives had 26m in cash at the year-end, but has since spent this on the acquisition of point-of-sale specialist SP Group. See earlier story. 

Shares rose 3p to 381p on the news.